Regions Announces $1.25 Billion Capital Raise

May 20, 2009 06:00 AM Eastern Daylight Time

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Regions Financial Corporation (NYSE: RF) today announced that it has
commenced public offerings of $1 billion of its common shares and $250
million of new mandatory convertible preferred shares (the “Cash
Offers”). The underwriters in the Cash Offers will have a 30-day option
to purchase up to an additional 15 percent of the offered amounts of
common shares and mandatory convertible preferred shares, as the case
may be, from the company. Goldman, Sachs & Co., and J.P. Morgan
Securities Inc. will serve as joint bookrunning managers for the Cash
Offers and Morgan Keegan & Co. Inc., will be lead manager. Regions has
filed or is filing prospectus supplements with the Securities and
Exchange Commission in connection with the Cash Offers.

The company also announced that it is offering to exchange common shares
for outstanding 6.625% Trust Preferred Securities issued by Regions
Financing Trust II (the “Exchange Offer.”)

Under the terms of the Exchange Offer set forth in the company’s
prospectus dated May 20, 2009, and the related letter of transmittal,
Regions will issue a number of common shares having a value (based on
the “Relevant Price”) equal to $700 for each Trust Preferred Security
accepted for exchange. The “Relevant Price” is the greater of (i) the
average volume weighted average price of Regions common shares during
the last five trading days of the currently scheduled exchange offer
period, and (ii) the “Minimum Share Price” of $2.65 per share. The
Exchange Offer will expire at 11:59 p.m., Eastern time, on Wednesday,
June 17, 2009, unless extended or earlier terminated.

The mandatory convertible preferred shares will convert into a variable
number of shares of Regions common stock on December 15, 2010, unless
earlier converted at the option of a holder or Regions. The conversion
rate and the dividend rate on such securities will be determined by
negotiations between Regions and the underwriters.

The Cash Offers and the Exchange Offer are the first steps of a
comprehensive Capital Plan to satisfy the $2.5 billion Tier 1 common
equity requirement prescribed by the Federal Reserve’s Supervisory
Capital Assessment Program (“SCAP”), which Regions currently expects
will be accomplished without further investment by the U.S. Treasury in
Regions. The common shares expected to be issued in the Cash Offer and
the Exchange Offer will qualify as Tier 1 capital and Tier 1 common
equity. The mandatory convertible preferred shares in the Cash Offer are
also expected to satisfy a portion of the capital requirement identified
by SCAP. The remaining capital needed is expected to be raised through a
combination of actions including (i) additional liability management
actions including possible exchanges of equity for our and Regions
Bank’s $4.25 billion of outstanding subordinated debt and $345 million
of additional trust preferred securities, (ii) sales of non-core assets
and businesses, (iii) pre-provision earnings in excess of the amounts
assumed under the SCAP analysis, (iv) a potential reduction in
disallowed deferred tax assets as a result of increased Tier 1 capital
levels, and (v) if necessary, the issuance of common equity and other
Tier 1 common equity qualifying instruments.

Regions has filed or is filing registration statements (including
prospectuses) with the Securities and Exchange Commission for the Cash
Offers and the Exchange Offer. Before you invest, you should read the
prospectuses in those registration statements and other documents the
company has filed with the SEC for more complete information about the
company and the Cash Offers and the Exchange Offer. The registration
statement relating to the Exchange Offer has not yet become effective
and common shares may not be sold nor may offers to buy be accepted in
connection with the Exchange Offer prior to the time that such
registration statement becomes effective. You may obtain these documents
for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the prospectus and prospectus supplement may be obtained
upon request by contacting Regions Investor Relations, 205-581-7890;
Goldman, Sachs & Co., Attention: Prospectus Department, 85 Broad Street,
New York, NY 10004, telephone: 212-902-1171 or 866-471-2526, fax:
212-902-9316, email: Prospectus-ny@ny.email.gs.com;
J.P. Morgan Securities Inc., 4 Chase Metrotech Center, CS Level,
Brooklyn, NY 11245, Attention: Prospectus Department, 718-242-8002; or
Morgan Keegan & Co. Inc., Equity Syndicate, 901-529-5357.

This press release is for informational purposes only and is not an
offer to buy or the solicitation of an offer to sell, any securities.
The solicitation of offers to purchase our common shares and mandatory
convertible preferred stock will be made only pursuant to the company’s
prospectus supplements dated May 20, 2009, and the solicitation of
offers to exchange the Trust Preferred Securities will only be made
pursuant to the company’s prospectus dated May 20, 2009, and related
documents that the company has filed or will file with the SEC.

About Regions Financial Corporation

Regions Financial Corporation, with $142 billion in assets, is a member
of the S&P 100 Index and one of the nation’s largest full-service
providers of consumer and commercial banking, trust, securities
brokerage, mortgage and insurance products and services. Regions serves
customers in 16 states across the South, Midwest and Texas, and through
its subsidiary, Regions Bank, operates 1,900 banking offices and
approximately 2,300 ATMs. Its investment and securities brokerage trust
and asset management division, Morgan Keegan & Company Inc., provides
services from over 300 offices. Additional information about Regions and
its full line of products and services can be found at www.regions.com.

Forward-looking statements

This press release may include forward-looking statements, which
reflect Regions current views with respect to future events and
financial performance. Forward-looking statements are not based on
historical information, but rather are related to future operations,
strategies, financial results or other developments. Forward-looking
statements are based on management’s expectations as well as certain
assumptions and estimates made by, and information available to,
management at the time the statements are made. Those statements are
based on general assumptions and are subject to various risks,
uncertainties and other factors that may cause actual results to differ
materially from the views, beliefs and projections expressed in such
statements. These risks, uncertainties and other factors include, but
are not limited to, those described below:

In October 2008, Congress enacted, and the President signed into
law, the Emergency Economic Stabilization Act of 2008, and on February
17, 2009, the American Recovery and Reinvestment Act of 2009 was
signed into law. Additionally, the Department of the U.S. Treasury and
federal banking regulators are implementing a number of programs to
address capital and liquidity issues in the banking system, and may
announce additional programs that will apply to Regions in the future,
all of which may have significant effects on Regions and the financial
services industry, the exact nature and extent of which cannot be
determined at this time.

Regions’ ability to raise sufficient capital to satisfy the SCAP
requirements without additional Government investment.

Until Regions is able to repay the outstanding preferred stock
issued under the Troubled Asset Relief Program (“TARP”), the impact of
compensation and other restrictions on recipients of TARP preferred.

The impact of possible additional loan losses and reserve build-up
on earnings and capital.

Regions’ ability to manage fluctuations in the value of assets and
liabilities and off-balance sheet exposure so as to maintain
sufficient capital and liquidity to support Regions’ business.

Regions’ ability to achieve the earnings expectations related to
businesses that have been acquired or that may be acquired in the
future.

Regions’ ability to expand into new markets and to maintain profit
margins in the face of competitive pressures.

Regions’ ability to keep pace with technological changes.

Regions’ ability to develop competitive new products and services
in a timely manner and the acceptance of such products and services by
Regions' customers and potential customers.

Possible changes in general economic and business conditions in the
United States in general and in the communities Regions serves in
particular.

Possible changes in the creditworthiness of customers and the
possible impairment of the collectability of loans.

The effects of geopolitical instability and risks such as terrorist
attacks.

Possible other changes in trade, monetary and fiscal policies, laws
and regulations, and other activities of governments, agencies, and
similar organizations, including changes in accounting standards, may
have an adverse effect on our business.

Possible changes in consumer and business spending and saving
habits could affect Regions’ ability to increase assets and to attract
deposits.

The effects of weather and natural disasters such as droughts and
hurricanes.

The foregoing list of factors is not exhaustive; for discussion of
these and other risks that may cause actual results to differ from
expectations, please look under the caption “Forward-Looking Statements”
in Regions’ Annual Report on Form 10-K for the year ended December 31,
2008, and Form 10-Q/A for the quarter ended March 31, 2009, as on file
with the Securities and Exchange Commission.

The words "believe," "expect," "anticipate," "project," and similar
expressions often signify forward-looking statements. You should not
place undue reliance on any forward-looking statements, which speak only
as of the date made. Regions assumes no obligation to update or revise
any forward-looking statements that are made from time to time.